I think it depends on the market. I can say pretty certain that with the handful of dealers we have in Utah-that discount would be impossible. While it may be knowing "how to shop"-will the local market "let you shop" your way. I can tell you here in Utah there is a $399.00 doc fee by all dealers. They know that every dealer charges it and you can't threaten to go else where.
The doc fee is actually irrelevant - they could call it the Purple People Eater Fee and it wouldn’t change the nature of what it is - part of the dealer’s profit.
One dealer could have a $999 doc fee and another dealer may charge $399, and the one with the higher published doc fee may end up selling the vehicle cheaper.
When shopping dealer’s asking prices, I ignored whatever they claimed their doc fee was, and, instead, focused on the bottom line.
I treated the process like a bid, emailing every dealership I could find that had the vehicle we were looking for, in stock, and created a spreadsheet to keep track of everything (this wasn’t my idea; I actually borrowed the idea from someone on T4R.org).
Local dealerships weren’t willing to come down much - couple thousand, maybe. But there were a couple of dealerships in the DFW area who did, so I booked a cheap flight, flew down with a check from my credit union, and drove it back.
But, yeah, you’re right - it’s all about supply & demand. You have to find the dealer that wants to sell it the worst! The ones around here weren’t willing to deal, so I found one that was.
Also didn’t hurt anything, I’m sure, that I bought at the end of December during the Toyotathon event. Also, I don’t think many people are looking for what we wanted (2WD, base model with no options except 3rd row seat).